June 29, 2015 We now know that this administration lied about ObamaCare. Specifically insurance premiums are going UP. But the Supreme Court has again ruled in support of Obamacare and for all intents this will be a permanent fixture as America goes down the path of socialism. Americans are now demanding more and more entitlements which explains why the ultra liberal socialist Bernie Sanders is so popular…free money….free education….free goodies from your friendly government. Hell, what’s not to like.
So why are we bringing up Obamacare?
When Obamacare was originally passed, we should have been smart enough to get into the healthcare stocks/ETF’s. Quite simply we did not see the investing opportunity. Sometimes you can’t see the forest for the trees. Now it’s too late to get in.
But we are not going to sit around and cry in our soup. There are some interesting buys in the healthcare Individual Corporate Bond market. But before we get into that please read the following:
This was a point made by Stephanie Pomboy in an article entitled “What To Expect In The Q2 GDP Number” by Elizabeth MacDonald.
“Spending on healthcare (insurance and services) has increased $232 billion over the last twelve months. That increase accounts for a big ‘two-thirds’ of the $353 billion in consumer spending and one-third of the $666 billion growth in total GDP over the stretch.
And wage gains are being wiped out by rising health costs. ‘The increase in healthcare outlays over the last year is roughly equal to the $284 billion in wage gains for households during that time.'”
A little more background before we go further. With a few exceptions, we recommend investors invest only in Individual Corporate Bonds, NOT bond funds. Here is a good overview of this market from http://www.StreetTalkLive.com
“The rise and fall of interest rates are only of concern if you own bond funds or bond related ETF’s.
Bond funds and bond related ETF’s (exchange traded funds) ARE NOT BONDS. Funds and ETF’s are a BET on the DIRECTION of interest rates just as stocks are a bet on the direction of the market. There is no return of principal function for bond funds or bond related ETF’s and, therefore, they must be managed in a portfolio just as you would manage a stock position.
However, the rise and fall of interest rates is of very little concern in a portfolio of individual bonds that are being held until maturity. The only time the level of interest rates becomes of concern is when a bond owner wishes to liquidate a bond position due to changes in the borrower’s fundamentals, credit worthiness or the bond owner needs to raise liquidity.”
So as mentioned earlier we looked at some INDIVIDUAL CORPORATE bonds from healthcare companies. Here are some investments that you may find suitable. Hold to maturity.
HCA 2023 4.4% Cusip 404121AF2
HCP 2025 4.27% Cusip 40414LAM1